Longest-Ever Shutdown may Soon End, says Hassett, Citing Protests and Moderate Democrats
The three-week US government shutdown could end this week, allowing stalled crypto ETF applications and bills to move forward.
As the United States federal government shutdown enters its 21st day on October 21, 2025, White House economic adviser Kevin Hassett expressed optimism that the impasse could conclude by week's end, potentially unlocking stalled regulatory advancements in the cryptocurrency industry. In a Monday interview on CNBC's "Squawk Box", Hassett, a vocal crypto proponent who disclosed over $1 million in Coinbase holdings earlier this year, attributed the deadlock to Senate Minority Leader Chuck Schumer and suggested moderate Democrats would soon prioritise reopening operations.
"The moderate Democrats will move forward and get us an open government, at which point we could negotiate whatever policies they want," he stated, alluding to the recent nationwide "No Kings" protests against President Donald Trump that may have delayed bipartisan action. Should negotiations falter, Hassett warned of "stronger measures" from the Trump administration, including potential workforce reductions. A top contender to succeed Federal Reserve Chair Jerome Powell in May 2026, Hassett's comments underscore the administration's leverage in fiscal battles, now the longest full shutdown in U.S. history and the third under Trump.
The shutdown, triggered at midnight on October 1, 2025, stems from partisan clashes over appropriations for fiscal year 2026, exacerbated by Trump's push for rescissions under the Rescissions Act of 2025 to codify cuts from the Department of Government Efficiency (DOGE). Republicans accuse Democrats of obstructing waste reduction and demanding concessions like Obamacare subsidies and protections for foreign aid, while Democrats counter that GOP intransigence risks essential services. A Senate vote on a House-passed funding bill through November 21 failed again on Sunday by 54-44, short of the 60-vote filibuster threshold despite 18 Democratic crossovers.
With furloughs affecting hundreds of thousands of federal workers—who missed their first pay cheques last week—and programmes like WIC sustained via tariff revenues, the economic toll mounts. Each week costs the U.S. economy billions, per Hassett, fuelling public frustration amid the Capitol's sunrise standoffs. Prediction markets like Polymarket reflect tempered hope, pricing a 71% chance the closure persists beyond this week, with volumes exceeding $200,000 on extended scenarios.
The impasse has rippled into the crypto realm, halting Securities and Exchange Commission (SEC) reviews deemed non-essential, leaving at least 16 exchange-traded fund (ETF) applications in limbo—including those for Litecoin (LTC), XRP, Solana (SOL), Cardano, Dogecoin, and Hedera (HBAR). Deadlines from October 2 to 24 have lapsed without action, as the SEC operates on a skeleton crew of under 10% staffing, per contingency plans. Analysts like Nate Geraci of The ETF Store foresee a "floodgates" surge post-resolution, potentially igniting an altcoin season by broadening regulated access and drawing institutional capital.
Existing spot Bitcoin and Ethereum ETFs, greenlit in 2024 and 2025, trade uninterrupted, but the freeze amplifies market uncertainty amid Bitcoin's hover above $100,000. Mid-September discussions with lawmakers, including Strategy's Michael Saylor and backers of Sen. Cynthia Lummis's BITCOIN Act, advanced Trump's Strategic Bitcoin Reserve—aiming for budget-neutral BTC acquisitions—but await full resumption for momentum.
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Yet, glimmers of progress persist: Democratic senators are slated to convene a roundtable Wednesday with executives from Coinbase, Circle, Ripple, and Kraken to advance a proposed U.S. crypto market structure bill, focusing on clearer regulations for stablecoins and digital assets. This comes as the shutdown, the 11th in history, eclipses the 1995-96 21-day closure if it endures past Tuesday. Broader impacts include delayed economic data releases, heightening volatility across risk assets, though crypto's decentralised nature buffers direct hits.
Hassett's forecast, if realised, could catalyse approvals and legislative wins, aligning with Trump's pro-innovation stance. As Capitol Hill reconvenes, the stakes blend fiscal brinkmanship with sectoral futures, testing Washington's capacity to bridge divides before the standstill claims second place among the longest shutdowns—behind only the 35-day 2018-2019 episode.
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